Short sellers are abandoning their positions as the market reaches new highs:

Short interest in U.S. stocks fell to just 2.95% by the end of February, S&P Global Market Intelligence says. That’s down 45 basis points from the short interest level at the end of 2020 when it was 3.4%. Short sellers, it seems, simply couldn’t take the heat and got out. Many closed short positions rather than enduring more brutal losses as the shares rallied.

Stocks including GameStop Corp. have seen huge drops in short interest. Other heavily shorted stocks like Ligand Pharmaceuticals and Bed Bath and Beyond have also seen short sellers head for the exits.

Below are the S&P 1500 companies with the largest decreases in short selling:

This will make it harder for the likes of Reddit’s Wallstreetbets to engineer short squeezes. But it also reflects a positive view of the economy and buoyant markets.

For more on stocks and Wallstreetbets, check out these posts:

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Photo: “Old EXIT sign. AbandonedCharleston Navy Yard.” by slworking2 is licensed under CC BY-NC-SA 2.0

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